The latest report from the African Development Bank (AfDB) has forecasted sluggish economic growth for Ghana and Nigeria in 2024, contrasting with the expected expansion across other West African nations.
According to the AfDB’s macro-economic performance outlook for 2024, the overall growth rate for the West African region is estimated to range between 0.8% and 4.0% this year, with a projected increase to 4.4% in 2025.
However, the report indicates that Ghana and Nigeria are anticipated to experience the slowest growth rates in the region. Every other country in the sub-region, aside from Nigeria and Ghana, is expected to achieve growth rates of at least 4% in 2024. Leading this growth trend is Niger, forecasted to achieve an impressive growth rate of 11.2%, followed by Senegal and Ivory Coast at 8.2% and 6.8%, respectively.
The report underscores that “except for Nigeria and Ghana, all countries in the region are projected to grow at least 4 percent in 2024.”
For Nigeria, the AfDB anticipates a growth rate of 2.9% in 2024, with a slight improvement to 3.7% by 2025. This modest growth trajectory is attributed to recent policy reforms, including the removal of fuel subsidies and efforts to stabilize foreign exchange markets. However, these measures have led to temporary increases in living costs, resulting in decreased consumer spending and investment.
In contrast, Ghana’s economic growth is expected to marginally increase to 2.8% in 2024, up from a sluggish 1.5% in 2023. The slow pace is attributed to persistent inflationary pressures, which continue to strain household budgets and hinder economic recovery.
Both Ghana and Nigeria have faced similar economic challenges in recent years. Ghana experienced an economic downturn in 2023, marked by high inflation exceeding 50%, although recent reports indicate a significant easing to 23.4%. Similarly, Nigeria’s economic difficulties stemmed from currency redesign issues and significant reforms initiated by President Tinubu, contributing to a 27-year high inflation rate of 28.92% as of December 2023.
The AfDB report highlights the need for targeted policy interventions to address the economic challenges faced by Ghana and Nigeria, emphasizing the importance of sustainable growth strategies to foster economic resilience and prosperity in the region.
Credit: Nairametrics
